Are you saying that your sight picture in the handgun scope should be 1" at 100 yds to be able to shoot well at that distance?

No, I'm saying that you don't need a tiny target or the ability to see a tiny target to shoot tiny groups. You need a target that you can consistently bracket your crosshairs against. For example, when shooting iron sight handguns at 25yds, I use a 3" black square to bracket the front sight against. Or a 5" black square at 50yds.